exv10w35w5



 





EXHIBIT 10.35.5




FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT




     THIS FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is
made and entered into as of the 9th day of February, 2004 (“Effective Date”),
by and among CONGRESS FINANCIAL CORPORATION (SOUTHWEST), a Texas corporation
(“Lender”) and SPORT SUPPLY GROUP, INC., a Delaware corporation (hereinafter
referred to as “Borrower” or “SSG”).



PRELIMINARY STATEMENTS




     A. Lender, SSG and Athletic Training Equipment Company, Inc., a Delaware
corporation (“ATEC”) have entered into that certain Loan and Security
Agreement, dated March 27, 2001, as amended by that certain First Amendment to
Loan and Security Agreement dated October 1, 2002, that certain Second
Amendment to Loan and Security Agreement dated June 27, 2003, that certain
Third Amendment to Loan and Security Agreement dated November 6, 2003, and as
further amended by that certain Fourth Amendment to Loan and Security Agreement
dated December 29, 2003 (as amended, modified or supplemented from time to
time, the “Loan Agreement”), pursuant to which Lender has entered into certain
financing arrangements with SSG and ATEC.



     B. SSG has since sold all of the issued and outstanding capital stock of
ATEC and ATEC has been released from its obligations as a Borrower under the
Loan Agreement.



     C. The parties hereto have agreed to further amend the Loan Agreement as
hereinafter set forth.



     NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound, agree as
follows:



AGREEMENT




ARTICLE I

Definitions




     1.01 Capitalized terms used in this Amendment are defined in the Loan
Agreement, as amended hereby, unless otherwise stated.



ARTICLE II

Amendments




     2.01 Amendment to Various Sections.



 









 






     (i) Amendment to Section 1.42. Effective as of the Effective
Date, Section 1.42 of the Loan Agreement is hereby amended by
deleting the definition of “Material Adverse Effect” in its
entirety and replacing it with the following:




     “Material Adverse Effect” shall mean a material
adverse effect upon the business, operations,
properties, assets, goodwill or condition (financial
or otherwise) of Borrower on a consolidated basis. In
determining whether any individual event would have a
Material Adverse Effect, notwithstanding that such
event does not of itself have such effect, a Material
Adverse Effect shall be deemed to have occurred if the
cumulative effect of such event and all other then
existing events would have a Material Adverse Effect.
Notwithstanding the foregoing, no Material Adverse
Effect shall be deemed to have occurred, unless, at
the time of determination, a Default or Event of
Default has occurred and is continuing or the Excess
Availability, as determined by Lender, is less than
$5,000,000.”




     (ii) Amendment to Section 7.2. Effective as of the Effective
Date, Section 7.2 of the Loan Agreement is hereby amended by
inserting the following phrase immediately after the words
“material adverse information” therein:




     “at a time when a Default or Event of Default has
occurred and is continuing or when the Excess
Availability, as determined by Lender, is less than
$5,000,000”;




     (iii) Effective as of the Effective Date, each of Sections
8.1, 8.9(a), 8.9(b), 8.9(c) and 8.9(d) of the Loan Agreement is
hereby amended by inserting the following phrase immediately after
the words “material adverse effect” therein:




     “at a time when a Default or Event of Default has
occurred and is continuing or when the Excess
Availability, as determined by Lender, is less than
$5,000,000”.



ARTICLE III

Conditions Precedent




     3.01 Conditions to Effectiveness. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent, unless
specifically waived in writing by Lender:




     (a) Lender shall have received, in form and substance satisfactory
to Lender and its legal counsel:



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     (i) this Amendment, duly executed by Borrower;




     (ii) a certificate of the Secretary of Borrower dated as of
the date of this Amendment, in form and substance satisfactory to
Lender, certifying among other things, (i) that Borrower’s Board of
Directors has met and has adopted, approved, consented to and
ratified resolutions which authorize the execution, delivery and
performance by Borrower of this Amendment and all such other
Financing Agreements to which Borrower is or is to be a party, and
(ii) the names of the officers of Borrower authorized to sign this
Amendment and each of such other Financing Agreements to which
Borrower is or is to be a party hereunder (including the
certificates contemplated herein) together with specimen signatures
of such officers; and




     (iii) such additional documents, instruments and information
as Lender or its legal counsel may request.




     (b) The representations and warranties contained herein, in the Loan
Agreement and in the other Financing Agreements, shall be true and
correct as of the date hereof, as if made on the date hereof (unless
otherwise made on a specific date as set forth therein, in which case,
such representations and warranties shall be true and correct as of such
date).




     (c) No Event of Default or event or condition which, with notice or
passage of time or both, would constitute an Event of Default, shall have
occurred and be continuing, unless such event, condition or Event of
Default has been specifically waived in writing by Lender.




     (d) All corporate proceedings taken in connection with the
transactions contemplated by this Amendment and all documents,
instruments and other legal matters incident thereto shall be
satisfactory to Lender and its legal counsel.



ARTICLE IV

No Waiver




     Nothing contained in this Amendment shall be construed as a waiver by
Lender of any covenant or provision of the Loan Agreement or the other
Financing Agreements or of any other contract or instrument among Borrower and
Lender, and the failure of Lender at any time or times hereafter to require
strict performance by Borrower of any provision thereof shall not waive, affect
or diminish any right of Lender to thereafter demand strict compliance
therewith. Lender hereby reserves all rights granted under the Loan Agreement,
the other Financing Agreements and any other contract or instrument among
Borrower and Lender.



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ARTICLE V

Ratifications, Representations and Warranties




     5.01 Ratifications. The terms and provisions set forth in this Amendment
shall modify and supersede all inconsistent terms and provisions set forth in
the Loan Agreement and the other Financing Agreements, and, except as expressly
modified and superseded by this Amendment, the terms and provisions of the Loan
Agreement and the other Financing Agreements are ratified and confirmed and
shall continue in full force and effect. Borrower and Lender agree that (a)
the Loan Agreement, as amended hereby, and the other Financing Agreements shall
continue to be legal, valid, binding and enforceable in accordance with their
respective terms, and (b) the security interests in the Collateral are in full
force and effect.



     5.02 Representations and Warranties of Borrower. Borrower hereby
represents and warrants to Lender that (a) the execution, delivery and
performance of this Amendment and any and all other Financing Agreements
executed and/or delivered in connection herewith have been authorized by all
requisite corporate action on the part of Borrower and will not violate the
Certificate of Incorporation or Bylaws of Borrower; (b) the representations and
warranties contained in the Loan Agreement, as amended hereby, and any other
Financing Agreement are true and correct on and as of the date hereof and on
and as of the date of execution hereof as though made on and as of each such
date (unless otherwise made on a specific date as set forth therein, in which
case, such representations and warranties shall be true and correct as of such
date); (c) no Event of Default or event or condition which, with notice or
passage of time or both, would constitute an Event of Default under the Loan
Agreement, as amended hereby, has occurred and is continuing; (d) Borrower is
in full compliance with all covenants and agreements contained in the Loan
Agreement and the other Financing Agreements, as amended hereby; and (e)
Borrower has not amended, modified or in any way altered its Certificate of
Incorporation or Bylaws since March 27, 2001.



ARTICLE VI

Miscellaneous Provisions




     6.01 Survival of Representations and Warranties. All representations and
warranties made in the Loan Agreement or any other Financing Agreement,
including, without limitation, any document furnished in connection with this
Amendment, shall survive the execution and delivery of this Amendment and the
other Financing Agreements, and no investigation by Lender or any closing shall
affect the representations and warranties or the right of Lender to rely upon
them.



     6.02 Reference to Loan Agreement. Each of the Loan Agreement and the
other Financing Agreements, and any and all other agreements, documents or
instruments now or hereafter executed and delivered pursuant to the terms
hereof or pursuant to the terms of the Loan Agreement, as amended hereby, are
hereby amended so that any reference in the Loan Agreement and such other
Financing Agreements to the Loan Agreement shall mean a reference to the Loan
Agreement and the other Financing Agreements as amended hereby.



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     6.03 Expenses of Lender. As provided in Section 9.16 of the Loan
Agreement, Borrower agrees to pay on demand all costs and expenses incurred by
Lender in connection with the preparation, negotiation and execution of this
Amendment and the other Financing Agreements executed pursuant hereto, and any
and all amendments, modifications, and supplements thereto, including, without
limitation, all costs and expenses of filing or recording and the reasonable
costs and fees of Lender’s legal counsel (including legal assistants).



     6.04 Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.



     6.05 Successors and Assigns. This Amendment is binding upon and shall
inure to the benefit of Lender and Borrower and their respective successors and
assigns, except that Borrower may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of Lender.



     6.06 Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.



     6.07 Effect of Waiver. No consent or waiver, express or implied, by
Lender to or for any breach of or deviation from any covenant or condition by
Borrower shall be deemed a consent to or waiver of any other breach of the same
or any other covenant, condition or duty.



     6.08 Headings. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.



     6.09 Applicable Law. THIS AMENDMENT AND ALL OTHER AGREEMENTS EXECUTED
PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF TEXAS (WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW).



     6.10 Final Agreement. THE LOAN AGREEMENT AND THE OTHER FINANCING
AGREEMENTS, EACH AS AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION OF THE
PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS
EXECUTED. THE LOAN AGREEMENT AND THE OTHER FINANCING AGREEMENTS, AS AMENDED,
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES. NO MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY
PROVISION OF THIS AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED
BY BORROWER AND LENDER.



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     6.11 Release. BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE
WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS
LIABILITY TO REPAY THE “OBLIGATIONS” OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES
OF ANY KIND OR NATURE FROM LENDER. BORROWER HEREBY VOLUNTARILY AND KNOWINGLY
RELEASES AND FOREVER DISCHARGES LENDER, ITS PREDECESSORS, OFFICERS, DIRECTORS,
AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS,
ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES
WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR
UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY,
ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS
EXECUTED, WHICH BORROWER MAY NOW OR HEREAFTER HAVE AGAINST LENDER, ITS
PREDECESSORS, OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS,
IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT,
TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY
“LOANS”, INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING,
RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL
RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE LOAN
AGREEMENT OR OTHER FINANCING AGREEMENTS, AND NEGOTIATION FOR AND EXECUTION OF
THIS AMENDMENT.



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     IN WITNESS WHEREOF, this Amendment has been executed and is effective as
of the date first above-written.



	 	 	 	 	 
	

	 	LENDER:	 	 
	 
	 	 	 	 
	 	 	CONGRESS FINANCIAL CORPORATION
	 	 	(SOUTHWEST)
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	

	

	 	Name:	 	 
	

	 	

	

	 	Title:	 	 
	

	 	

	 
	 	 	 	 
	

	 	BORROWER:	 	 
	 
	 	 	 	 
	 	 	SPORT SUPPLY GROUP, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	

	

	 	Name:	 	 
	

	 	

	

	 	Title: